book it is written by Bob kierin who's the founder of fenol that book and the way Bob ran fenol all centers around this one idea that the leader of a company has to keep the entire organization committed to a common goal Costco's common goal is that we are going to commit to this everyday low

pricing strategy and they commit to it every single

we are aware that several investors are new to the fund and so it may be worth reiterating some ground rules so that you know where we stand one of nomad's key advantages will be

the aggregate patience of its investor base we are genuinely investing for the long term few are if Nomad is to have a competitive advantage over our peers this will come

why is this list not the same as the current Nomad portfolio

hy is it that no one but the founding Walton family owned

Walmart all the way through Zach and I were told a story which we enjoyed enormously and might help illustrate this point in the early 1970s a large successful fund management company analyzed its portfolio and discovered that their sale of IBM 30 years earlier had been a huge error of

we have argued that the biggest error an investor can make is the sale of Walmart or Microsoft in the early stages of the company's growth we wonder would selling Amazon today be the equivalent mistake of selling Walmart in 1980

let's invert the way to construct a portfolio the other way to construct a

portfolio that's different from how other people do it is to invert and start at 100% waiting and work down

although we are all interested in margin it must never be done at the expense of our philosophy margin must be obtained by

better buying emphasis on selling the right kinds of goods we want to sell operating efficiencies lower Mark markdowns greater turnover increasing the retail prices and justifying on the basis that we are still competitive could

why competing with Costco is so hard to do the firm is not interested in today's static assessment of performance it is managing the business as to raise the probability of

long-term success when Costco continues to recycle cost savings to the consumer it is lowering the probability of failure

it's their willingness to do the work necessary to trust their own judgment that allowed them to arrive at a very valuable earned secret and then the willingness to change their behavior to build their entire partnership around that earned secret